Useful Buyer Information and Frequently Asked Questions

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All About Financing

Choosing a lender is an important decision. You will want to choose a loan officer early in your home shopping process in order to confirm how much house you can afford and to discover any special circumstances that might pertain to your particular situation. Pre-qualifications are quick and are at no cost. They are well worth the effort. You wouldn't go to the store without cash, check or a credit card, would you? I strongly suggest using a local lender. Lenders who aren’t part of the local community do not have any incentive to actually follow through. Local lenders rely on referrals and are thus more likely to provide better and more timely service.

HUD Mortgage Information Booklet

Morgage Infomation Booklet. This booklet contains lots of great information about loans, lenders and how to shop for the best mortgage.

What is the difference between being pre-qualified and pre-approved?

There is a vast difference between being pre-qualified and pre-approved for a mortgage loan. Pre-qualifying is usually handled over the phone. You supply asset information so the loan officer can determine: approximately how much home you can afford, what your down payment will be, what your monthly payment will be, the loan programs you qualify for, and alternatives and strategies to help you buy the home of you dreams.

Pre-approval goes one step further. It involves complete verification of asset, credit and employment information. The lender will then issue a full credit loan approval. At this point you will know exactly the maximum loan amount and exactly what loan program or programs for which you have been approved – this approval is good for a limited amount of time (varies by lender). The pre-approval process can be going on while you are looking for your new home. Pre-approval normally shortens the time from contract to closing since the only other conditions (appraisal, inspection, title insurance, survey) can be completed in 1-3 weeks. Having a pre-approved loan usually strengthens your negotiating position as the Buyer because the Seller doesn’t have to be concerned with your ability to qualify for a loan.

Credit Reports

According to the Federal Trade Commission’s Bureau of Consumer Protection, the information contained in credit reports is now the top source of consumer complaints. Below are the phone numbers for the three largest credit reporting agencies. I recommend you review your credit file from time to time to ensure its accuracy.

TRW 800-392-1122, Equifax 800-685-1111, TransUnion 800-916-8800

Looking for a lender? Here is a list of lenders who can help. Some Local Lenders

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Where Can I Find Information About Available Homes?

The Internet:

Information about all homes that are listed by area Realtors are available at www.coloproperty.com This database is similar to the one that Realtors use with a few exceptions. www.coloproperty.com is updated only once a day and it does not indicate if the property is already under contract. Despite these deficiencies, www.coloproperty.com is an excellent way to get an idea for the types of homes that are currently available. If a home looks interesting to you, please let me know so that I can look up more detailed information about it.

Newspaper and Magazine Real Estate Ads:

The weekend edition of the local paper is sure to contain a section about the local real estate for sale. While these ads often catch your attention, they often do not list all the characteristics of a home. If one looks promising, let me know so that I can look up more detailed information about it.

For Sale Signs:

One of the best ways to search for a home is to locate the neighborhood(s) you'd like to live in. Tour the neighborhood and see if there are any homes currently for sale or For Sale By Owners. If one looks interesting, let me know so that I can look up more detailed information about it. Remember that many Realtors do not put if the home is under contract yet so just because there is a For Sale sign does not mean its available.

Open House:

Open Houses are a great way to get to know the local inventory. There your can take you time and see a variety of homes. It is important to remember that the agent at the open house may be working for the seller. To help avoid any issues of agency, be sure to tell the Realtor at the Open House if you are already working with an agent.

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What is an Improvement Location Certificate?

Before a subdivision is developed, the developer usually creates a land survey plat. This land survey plat includes a scale drawing of the boundaries of a parcel of land which is complied by a series of exact and precise linear and angular measurements taken from a known point of origin developed by mathematical principals of surveying. The purpose of the land survey plat is to determine, locate and or restore any real property boundaries. The land survey plat will also indicate any conflicting boundary evidence and any recorded and/or apparent rights-of-way or easements.

The improvement survey plat is comprised of the same precise information as is the land survey plat mentioned above, and in addition indicates the location of all structure and improvements situated on the parcel of land. The improvement survey plat will also show visible encroachments. It will show any fences, hedges, or walls on or within two feet of both sides of all boundaries. The improvement survey plat will show the location of all visible above ground utilities, and all underground utilities for which there is visible surface evidence.

The improvement location certificate is another method of describing and approximately locating property, that is often required by lenders and insurance companies. It offers certain reasonable assurances regarding potential boundary or encroachment problems that may affect their interests. It also illustrates the location of improvements and conditions of the property. However, it is based on assumptions regarding boundary location and is not a precise survey. The improvement location certificate is typically used in the purchase of single family residential property located within the established subdivided urban and suburban areas of Colorado.

WHAT THE IMPROVEMENT LOCATION CERTIFICATE IS:

WHAT THE IMPROVEMENT LOCATION CERTIFICATE IS NOT:

Sometimes the improvement location certificate will indicate a possible encroachment or some other evidence of a boundary dispute. In this case, a true survey, (i.e. improvement survey plat or land survey plat) would be required to clarify or resolve any discrepancies.

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What is an Appraisal ?

An appraisal is a step-by-step analysis undertaken by a professional appraiser for the purpose of accurately estimating an opinion of value. When a mortgage loan is made, the loan is secured by the real estate. Lenders want to be reasonably sure the amount of the loan does not exceed the value of the real estate. So the lender normally requires a professional appraiser to estimate the value of the property for the purpose of estimating market value.

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What is Title Insurance ?

You should realize whenever you buy property, that the owner who is selling it to you has extremely strong rights, as do his family and heirs. Also, there may be others in addition to the owners who have rights in the property you are going to buy. These may be governmental bodies, contractors, or individuals who have unpaid claims against the property.

Anyone who has such a claim is, in a sense, a part owner. The property may be sold to you without the party who has a claim knowing about the sale. And you may know nothing about such a claim at the time you buy. It doesn’t matter. These claims may remain attached to the real estate you have purchased.

Will you get a clear title? It is of the greatest importance that you do. But this means that you must be informed about any of these claims against your land so that you can make certain they are cleared up before you buy. And that means that you must be protected against any undiscovered claims that may arise in the future to threaten your title and the possession of your property. Title insurance provides this two-fold protection.

You learn what claims there are against the property by a search of the public records. This is the first step the title insurance company takes in order to insure your title. Some of the things a title search uncovers are any unpaid taxes or mortgages; judgments against previous owners, easements, mechanics leins, and any other court actions or recorded documents, which can affect title to real estate. The title insurance company finds and reports such defects in title so that these matters can be corrected and cleared up.

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